Questioning the re-marginalisation of Africa

Jakkie Cilliers Correspondent In January 2011, even before the “Africa rising” narrative captured the popular imagination, the Institute for Security Studies wrote extensively about the continent’s growth prospects in a monograph titled, “African Futures 2050”.

It pointed to improvements in the quality of macro-economic governance, improved agricultural output and relatively stable political frameworks, as well as increased aid and debt relief, rising remittances and the impact of global growth — particularly that of China. Commodities, we argued, were important — but only responsible for a third to half of the surge in growth rates from the previous two decades. Africa’s prospects had undergone a structural shift for the better.

Subsequent work pointed to the divergent nature of the African growth story, where a dozen or so countries seemed trapped in a cycle of chronic fragility, while many others were making sterling progress. We noted that even at an average annual growth rate forecast of 6 percent for Africa’s 54 countries to 2035, the continent was unlikely to see the elimination of extreme poverty by 2030 — the first of the Sustainable Development Goals. For the majority of Africans, things are getting better; although not rapidly enough if compared, for example, with the speed at which China was able to transform itself.

To understand Africa’s changing power capabilities and its ability to influence global dynamics, we examined the potential of Africa’s “big five”: Nigeria, South Africa, Algeria, Egypt and Ethiopia. We concluded that only Nigeria had true potential to become a globally significant player, provided it could overcome its numerous governance and security challenges.

In general, Africa’s influence is set to expand, but given a lack of deep continental integration on both the political and economic front, the continent will remain relatively marginal in global affairs. The future is a world where three economic heavy weights — the United States of America (USA), China and eventually India, will have significantly more relative material and diplomatic power than others. Only a completely integrated European Union could join these three countries at the top table of global influence; and the gap between these global powers and the rest is set to remain large.

Against this background, it is now appropriate to offer a word of caution. Sub-Saharan Africa, in particular, may be overlooked on the global agenda and suffer a period of relapse into unsustainable development. Far from a continued scramble for Africa, as some analysts exalted only a few years ago, we’re far more likely to see a potential re-marginalisation of sub-Saharan Africa in the years ahead.

Three factors underpin this. The first is changes in China — today Africa’s largest trading partner, but a country whose own economic rebalancing has reduced its thirst for commodities. This is, of course, temporary. Eventually India’s economic awakening should drive the next commodities super-cycle and Africa should regain some of its lost momentum. But that is still some years hence. In the meantime, global growth elsewhere remains anaemic and insufficient to replace China’s previous demand for Africa’s natural resources.

In addition, Saudi Arabia’s determination to protect its global share of the oil market, resulting in an oil price per barrel hovering below $30, has hit Africa’s oil producers very hard. Large oil producers such as Nigeria and Angola have seen their main source of revenue slashed and others, including aspirant and marginal producers — such as Ghana — face strong headwinds.

Countries such as Tanzania and Mozambique, who were counting on the potential of huge oil and gas incomes, have discovered that interest in exploiting their natural bounty has waned.

Together with the impact of the shale revolution in the US, Africa’s oil is not in current demand and this has translated into economic pain and strategic marginalisation, particularly for West Africa. In its place is a quite narrow security focus, which is linked to the threat that al-Qaeda and the Islamic State pose to the West.

The second reason relates to terrorism and refugees; the two scourges that are focusing all attention on the Middle East and, to a lesser extent, North Africa. Development assistance aimed at promoting inclusive growth, poverty alleviation, infrastructure development and good governance (traditionally from the West) is being decimated as Europe scrambles to respond to crises in Syria and elsewhere.

This is, of course, not necessarily a bad thing. Remittance flows to Africa have already surpassed development assistance in size, and it is only by levering taxes from their own citizens instead of relying on the largesse of taxpayers in other countries that Africa will develop. Accountability requires tax-paying citizens who have a practical incentive to hold their governments to account, and rising corporate and individual tax rates in Africa is a positive, if underreported, good news story.

On the other hand, millions of poor Africans stand the risk of losing the sustenance provided by humanitarian and development assistance at a time when their own governments do not provide. A new paradigm has emerged that looks to the private sector and its role in development and humanitarian assistance.

Business and the private sector, we are told, have to step up and assume their rightful place as the drivers of poverty alleviation, humanitarian assistance and employment creation.

There is much truth here. Eventually only the private sector can expand employment and create wealth. But current levels of development mean that in much of Africa, only government can fight inequality and exploitation, ensure stability and manage development processes that are inherently disruptive. Rich countries can do with less government since they have a thick web of norms and institutions, but poor countries cannot.

By default, the private sector is interested in profit. Without appropriate regulation and oversight, its role exacerbates divisions rather than promoting inclusive growth. Much of our previous work has therefore underlined the importance of governance for Africa. In fact, we have been arguing that as much as North Africa and the Middle East suffer from a severe deficit in levels of inclusion in governance, sub-Saharan Africa faces large constraints on the capacity of governments to deliver on development.

The third factor relates to a change in global patterns of political violence. After the turbulence, war and instability that accompanied the end of the Cold War, Africa experienced a steady peace dividend that lasted until about 2010 or mid-2011. Thereafter, violence and instability in Africa (and indeed elsewhere) increased, although it seems to have levelled off in 2015. It is still too soon to tell whether that was a pause or a sign of a positive reversal in trends.

Like others, we believe that the locus of global instability will move to the Middle East in the years ahead. The disastrous US-led invasion of Iraq rekindled Islamist terrorism in the Middle East, and it is likely to intensify instability for a decade or longer. Whereas the USA previously served as peace guarantor, it is unable to continue in that role. Hopefully, the 2015 levelling off in conflict will continue in 2016 and become a downward trend.

In the meantime, great power games have shifted to the Middle East. The Sunni/Shia divide now pits Saudi Arabia against Iran in an ever-widening series of proxy wars, in a region that is geo-strategically important, heavily armed, politically unstable and already host to an important number of proxy wars. — ISSAfrica.